Crypto Market Weekly Report: BTC Fluctuates at High Levels Due to Multiple Influencing Factors

Since the rebound from the April low, BTC has seen a maximum increase of 50%, outperforming the Nasdaq index and reaching a historical high. However, the significant rise in the short term has accumulated certain selling pressure. Since May 22, a large-scale sell-off has begun in the BTC market, putting pressure on BTC, which is at a high level and leading US stocks, becoming the driving force behind the price decline.

This Thursday, due to conflicts between certain political figures leading to market panic, BTC fell to the support level of 100,000 USD. Subsequently, the price rebounded continuously, returning above the upward trend line. Accompanied by adjustments in the US stock market, the buying power of the BTC spot ETF channel has converged, making it difficult for BTC to absorb selling pressure and continue rising in the short term. It is worth noting that as the price corrected, the outflow scale from exchanges also significantly increased this week, indicating that new capital is taking the opportunity of the adjustment to absorb chips.

The positive non-farm employment data has created a good atmosphere for the stabilization and rebound of BTC, but a real breakthrough to a new level may still require greater progress in tariff policies, encryption currency policies, or interest rate cuts by the Federal Reserve.

Policies, Macroeconomic Finance and Economic Data

In May, the number of jobs in the United States increased by 139,000, which is the lowest since February, but slightly higher than the market expectation of 126,000. The unemployment rate in May remained at 4.2%, showing no deterioration. The data performance slightly exceeded expectations, driving the three major U.S. stock indexes up, while gold fell.

The current market pricing is close to a "soft landing", where the economy gradually slows down to a sustainable growth level without experiencing a severe recession or massive unemployment. The current economic and employment data align with this characteristic; although there has been a certain decline in GDP growth rate, it is due to the Federal Reserve's proactive cooling measures. Inflation data is decreasing in an orderly manner, the unemployment rate is stable, and the number of new jobs has not significantly decreased.

There is still uncertainty regarding tariff policies. Although the leaders of related countries have had conversations, they are still in the negotiation stage, and it will take time before an agreement is signed. At the same time, a certain country has raised steel and aluminum tariffs from 25% to 50%, prompting other countries to threaten retaliation.

Overall, driven by slightly better-than-expected non-farm data and slow but progressing tariff negotiations, U.S. stocks, U.S. bonds, and the dollar maintained a fragile balance and slightly tilted towards optimism in the past week.

crypto market

Since the rebound in April, BTC has outperformed the Nasdaq. The US stock market is building momentum to challenge previous highs, while BTC set a new all-time high on May 22.

Technical indicators show that BTC underwent a two-week correction after rebounding to a new high, retreating 3.07% last week and fluctuating slightly upward by 0.08% this week, presenting a long-legged doji on the weekly chart. During the adjustment, trading volume has been shrinking. The highest correction over the two weeks was around 10%, and the overall movement occurred within the previous bottom, with the lowest daily dip testing the ascending trend line.

In the context where the US stock market has not yet hit new highs, this adjustment after BTC reaches a new high is foreseeable and is also healthy. A period of volatility for a certain time is likely inevitable, and for the market to reach new highs and further ascend, greater progress may be needed in tariff policies, encryption currency policies, or interest rate cuts by the Federal Reserve.

Selling Pressure and Sell-off

Since April, BTC has rebounded from its lows, recording a maximum increase of 50%. With the history being refreshed to new highs, both short-term bottom-fishing funds and the long-term funds that are still in shock have seen some selling. This selling pressure reached a temporary peak on May 22 and has gradually decreased since then.

It is worth noting that while the sell-off has decreased, the outflow from centralized exchanges has increased, with this week's outflow reaching 76,520.72 coins, far exceeding the usual weekly outflow of 10,000 to 20,000 coins. This significant outflow can be seen as a strong recognition of the current price by long-term capital.

Fund In and Out

After the phase of floating profit appears, the phenomenon of realizing profits also occurs in the funds of the ETF channel. In the past two weeks, there has been a slight outflow of funds from the BTC spot ETF channel, with 135 million last week and 128 million this week. This outflow happened during a significant rise in BTC, and while the U.S. stock market experienced fluctuations.

Isolated, it is difficult to estimate when funds will flow back into this channel, but considering the overall trend of the US stock market, we believe there is no need to worry excessively about a significant decline. Although technically there is a possibility of revisiting 100,000 USD, it is quite challenging to grasp, and in a fragile balance of supply and demand, a breakthrough increase may occur within a day or two.

Period Indicators

According to the data platform, the BTC cycle indicator is 0.625, in an upward phase.